The partially convertible rupee closed  at 44.72 per dollar, after touching 44.98 in early trades.

Our in house Quant analysis forecast that Indian rupee has made a Intermediate bottom for many weeks to come.

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The catalyst for the dollar’s rebound was a massive fall in commodities on Thursday. Brent crude oil dived a record $12 a barrel, natural gas dropped over 7 percent and silver slumped by nearly $5, its biggest one-day decline since 1980.

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The partially convertible Indian rupee ended at INR 46.30/31 per USD, after hitting INR 46.48, its lowest since Feb 11. It had closed at INR 46.27/28 on Thursday. For the week, however, it rose about 0.4 per cent.

The US dollar’s rise led to demand from importers. The expected pressure on the Indian rupee to remain when trading resumes on Monday.

The USD  index against six major was up about 1 per cent.

A fall in local share prices also weighed on sentiment. The benchmark BSE India Sensex share index fell 0.8 per cent, tracking global stock markets which tumbled following Fed’s move.

One-month offshore non-deliverable forward contracts ended at INR 46.35/39, slightly weaker than the onshore spot rate.

In the currency futures market, the most traded near-month USD-INR contracts on the National Stock Exchange and MCX-SX  were at  INR 46.3275 and INR 46.3175 respectively.

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The Indian rupee ended at INR 46.27 against the USD, 16 paisa lower than Wednesday’s close.

The US dollar’s rise spooked importers, who began buying  USD  to cover their requirements. The Indian rupee  should  trade in a  INR 46.15-46.35 range on Friday.

The US dollar was close to a seven-month high against a currency basket after the Federal Reserve’s minutes showed several policymakers had discussed strategies for withdrawing monetary stimulus.

The International Monetary Fund plans to sell more gold in the market, pushing down bullion prices and commodity-linked currencies.

The USD  held on to its gains after Wednesday’s stronger US economic data, while fiscal concerns in the euro zone countries continued to drag on the euro.

The USD index, the currency’s gauge against six majors was up about 0.3% by late evening. The euro has fallen almost 5% against the USD since the start of the year on concerns about the fiscal health of Greece and other euro zone countries. This has weighed on emerging market currencies.

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The partially convertible Indian rupee ended at INR 46.27/28 per USD, about 0.3 per cent lower than Wednesday’s close of INR 46.11/12. It traded in the range of INR 46.1750 to INR 46.31.

The US dollar’s  rise spooked importers, who began buying dollars to cover their requirements. They expects the rupee to trade in a  INR 46.15-46.35 range on Friday.

The USD was close to a seven-month high against a currency basket after the Federal Reserve’s minutes showed several policymakers had discussed strategies for withdrawing monetary stimulus.

The USD  index against six majors was up about 0.3 per cent.

Foreigners were net buyers of  USD 178 million in the last three sessions, after dumping USD 2.2 billion over 16 sessions. Last year, record inflows of USD 17.5 billion had helped the Indian rupee rise 4.7 per cent.

One-month offshore non-deliverable forward contracts ended at INR 46.33/37, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month USD-INR contracts on the National Stock Exchange and MCX-SX were at INR 46.2725 and INR 46.27 respectively.

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At 9:30 a.m. the partially convertible rupee was at  INR 46.39/40 per dollar, stronger than INR 46.50/51 at close on Thursday. Indian financial markets were shut on Friday for a local holiday.  Dealers said there were some bunched-up dollar inflows as markets were closed on Friday, which was helping the rupee, but they said the market would mostly be lacklustre in the absence of fresh triggers.

Traders would watch the inflation data due around noon for cues. India’s wholesale annual price inflation is seen at 8.21 percent in January. This compares with an annual rise of 7.31 percent in December.

Most Asian markets are shut on Monday and Tuesday for the Lunar New Year holidays. Indian shares were choppy in early trade.

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The rupee opened at INR 46.46 and closed at INR 46.72, against the earlier close of INR 46.26.

While the rupee is inherently strong, one can’t disregard global investment markets and currency markets. There are lot of inflows which is supporting the rupee at these levels

In the overseas market, the US dollar is gaining because risk aversion is coming back into the market.

The Indian rupee weakened on the back of a strong US dollar overseas and losses in domestic investement market.

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Most of the Indian IT companies earn a big chunk of its income from abroad in foreign currencies and the  Indian rupee’s value against the USD is vital for them. A stronger Indian rupee is not beneficial to any exporter including software exporters like HCL and the Indian rupee has appreciated 3-5 per cent in the last two quarters.

As far as the net income is concerned the company in the next 8-9 months would be indifferent to the exchange rate, the value of the rupee versus US dollar which is susceptible to many factors in the forex market.

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Stocks across the US and Asian saw a sell-off as US President Barack Obama proposedlimiting risk-taking at US banks and concern grew that China will do more to cool itseconomy. This drove down shares across the globe and weakened demand for riskier, orhigher-yielding assets.

BSE India Sensex and NSE India Nifty both fell 2 percent in early trade on Friday, dropping below 17,000 for the first time in a month after sharp falls in global markets. Volatility ruled the roost as the key benchmark indices cut losses after witnessing a sharp sell-off.

The BSE 30-share Sensex was down 266.25 points or 1.12%, and fell and closed the day at 16829 up  NSE Nifty hovered around the crucial 5,000 mark closing at 5036 dipping below the 5,000 during intrada day.

Meanwhile, oil fell below $76 a barrel in electronic session and looks poised for a second weekly decline. Crude oil for March delivery was trading down 22 cents at US$ 75.88 per barrel.

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MUMBAI, Jan 21 (www.GoldTradingcalls.com) – The Indian rupee continues to weaken aganist the USD from a Intermedaite low reached on new two-week lows on 12th Jan at USD INR at 45.09.

Exporters stepped up dollar sales around the psychological 46 per dollar mark while U.S. unit stayed steady at morning levels.

USD Euro hit a five-month low on the dollar,down by worries about Greece’s deteriorating finances, while the Australian dollar remained on the defensive after strong Chinese data raised the risk of tightening there.

Dealers said exporters had stepped up dollar sales around the 46 per dollar mark helping prevent further losses in the unit. However, stocks were being watched for cues on foreign fund flows.

On the local Indian stock excahnges BSE Sensex was down 423 points to close at 17051 in line with mostly lower Asian markets

We expect USD INR to weaken further in the days to come. The chart clearly shows the the USD INR on a Inter mediate rally spree which commenced on Jan 12th. We have over layed USD index on the charts and it clearly shows USD INR has a positive corelation and mimics USD.

So what does it fortell to our Indian Markets future course for the new few weeks ? Keep checking my other post on my site.

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